Super funds lose $5.6 billion on dirty fossil fuels

9 February 2016

Having analysed the returns of fifteen of Australia’s largest superannuation fund options over the past two years, Market Forces estimate that those options have collectively lost over $5.6 billion on their fossil fuel investments over that time.

To make it as easy as possible for super fund members ensure that their money is aligned with their values, we have recently upgraded our Super Switch website. Super Switch allows users to examine their super funds’ exposure to fossil fuels, and take action to get their retirement saving out of coal, oil and gas.

Graph comparing performance of world index, coal and oil and gas stocks 2014 to 2015 (MSCI All Country World Index)

Many Australian super funds have recognised spoken publicly about climate change and the risks it poses to fossil-fuel related assets. In the wider financial world, there has been a growing body of opinion to suggest that fossil fuel assets are in danger of being left stranded as the world moves to limit global warming.

Now, there is some hint that these dire warnings are being realised, as coal, oil and gas company stocks have underperformed the world index over the past two years – check out the graph, which compares the performance of coal, oil and gas company stocks to the world index throughout 2014 and 2015.

Due to their investments in these companies since January 2014, the fifteen super options we analysed lost an average of $1,109 per member. See the table below for more detailed analysis of each of the fifteen funds’ losses.

The Paris climate summit in December 2015 underscored the desperate need for global action on climate change. To have any hope of meeting the internationally agreed target of less than two degrees of temperature rise, we cannot continue to invest in companies that would expand or prolong the fossil fuel industry.

We need super funds to fully disclose their current fossil fuel holdings so that they can be held accountable for their investment decisions. We also need them to immediately divest from pure play fossil fuel companies and engage with diversified companies to encourage a swift exit from the fossil fuel sector.

Super fund members can use our new and improved Super Switch website to examine their exposure to the coal, oil and gas industries and take action to get their retirement savings out of fossil fuels.